India Q2 PC sales slow on weak consumer demand.

by Raghu Krishnan     Jul 14, 2011

By CXOtoday Staff

PC sales in India in the second quarter grew slower, as consumers’ tightened purses to spend on other goods and over concerns on inflationary pressure and slowing economy, technology researchers IDC and Gartner said.

The dip in consumer PC sales in India is in contrast to the double digit growth registered in the Asian region, particularly in China, where sales grew despite inflationary challenges.
India showed weaker-than-expected consumer demand, while China’s PC market grew 10.9 per cent year over year, Gartner said.

In India, the PC industry is mirroring the trend in other sectors such as automobiles, which saw car sales dip to a two-year low in June, over rising interest rates and higher fuel prices.
India’s PC market for the first quarter to March grew 6.2 per cent to 2.6 million units over the same period last year, but fell short of double digit growth expectations due to slump in consumer demand, Gartner said in May.

Both researchers, who follow the January to December calendar, did not disclose PC sales for the three months to June in India, but reported higher than expected sales in the Asian region.

In contrast, global PC shipments were lower than initial projections. Worldwide PC shipments surpassed 85.2 million units in the second quarter, a 2.3% per cent increase from the same period last year, according to Gartner, Inc. These results are below Gartner’s earlier projection for 6.7 per cent growth. IDC said PC shipments went up by 2.6%, yet short of the 2.9% projection it made in the same period.

“PC Market continues to witness a softness of demand in the consumer space. They are primarily influenced by macroeconomic factors such as rising interest rates and inflationary pressures. With the recent spikes (primarily in 2011) in commodity pricing such as fuel and food items, the cause of concern continues to exist in the Indian market,” said Kiran Kumar, senior analyst at IDC India.

“Also, shift in the wallet share of buyers towards consumer goods such as televisions, thanks to event-based promotions around World Cup and IPL impacted the purchase of PCs, as noted in the first few months of the year. PC remains to be not seen as a commodity in the minds of the Indian buyers,” he added.

PC makers are however bullish. Sony India expects double it sales in India this year, even as the overall India PC market to grow by a third this year.

“We are bullish on the consumer PC market. We expect the overall industry for laptop to grow by 30 per cent this year over last year,” said Sachin Thapar, Head, IT and Mobile Division, Sony India. “For the company, we are expecting a sales growth of 100 per cent in FY11.Our target is to gain at least 20 per cent market share”.

IDC’s Kiran also expects consumer sales to pick in the coming months. “However, educational and government buying coupled with seasonal demand around festival seasons (like Diwali) are expected to boost the growth in the PC market towards the second half of 2011,” he said.